The partnership of Dale, Edgar, and Fred was dissolved, and by July 1, 2016, all assets had been converted into cash and all partnership liabilities were paid. The partnership balance sheet on July 1, 2016 (with partner residual profit and loss sharing percentages) was as follows: Cash P 10,000 Fred, capital(30%) Dale, capital(40%) Edgar, capital(30%) 40,000 (20,000) (10,000) Total assets 10,000 Total equity P 10,000 The value of partners' personal assets and liabilities on July 1, 2016 were as follows: Dale Edgar 30,000 P 20,000 Fred Personal assets Personal liabilities 45,000 P 30,000 P 25,000 10,000 Required: 1. Problem 1 - How much is Dale's maximum personal contribution to pay for his deficit capital? 2. Problem 1 - How much is Edgar's maximum personal contribution to pay for his deficit capital? 3. Problem 1 - How much is Fred's maximum personal contribution to pay for his deficit capital? 4. Problem 1 - How much will Fred receive upon liquidation after considering the personal contributions of Dale and Edgar? P.
The partnership of Dale, Edgar, and Fred was dissolved, and by July 1, 2016, all assets had been converted into cash and all partnership liabilities were paid. The partnership balance sheet on July 1, 2016 (with partner residual profit and loss sharing percentages) was as follows: Cash P 10,000 Fred, capital(30%) Dale, capital(40%) Edgar, capital(30%) 40,000 (20,000) (10,000) Total assets 10,000 Total equity P 10,000 The value of partners' personal assets and liabilities on July 1, 2016 were as follows: Dale Edgar 30,000 P 20,000 Fred Personal assets Personal liabilities 45,000 P 30,000 P 25,000 10,000 Required: 1. Problem 1 - How much is Dale's maximum personal contribution to pay for his deficit capital? 2. Problem 1 - How much is Edgar's maximum personal contribution to pay for his deficit capital? 3. Problem 1 - How much is Fred's maximum personal contribution to pay for his deficit capital? 4. Problem 1 - How much will Fred receive upon liquidation after considering the personal contributions of Dale and Edgar? P.
Accounting (Text Only)
26th Edition
ISBN:9781285743615
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter12: Accounting For Partnerships And Limited Liability Companies
Section: Chapter Questions
Problem 12.1BPR
Related questions
Concept explainers
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
Question
Transcribed Image Text:Exercise 1
The partnership of Dale, Edgar, and Fred was dissolved, and by July 1, 2016, all assets had
been converted into cash and all partnership liabilities were paid. The partnership balance sheet
on July 1, 2016 (with partner residual profit and loss sharing percentages) was as follows:
Fred, capital(30%)
Dale, capital(40%)
Edgar, capital(30%)
40,000
(20,000)
(10,000)
Cash
P
10,000
P
Total assets
P
10,000
Total equity
10,000
The value of partners' personal assets and liabilities on July 1, 2016 were as follows:
Dale
Edgar
30,000 P
20,000
Fred
45,000 P
30,000
Personal assets
25,000
10,000
Personal liabilities
Required:
1. Problem 1 - How much is Dale's maximum personal contribution to pay for his
deficit capital?
2. Problem 1 - How much is Edgar's maximum personal contribution to pay for his
deficit capital?
3. Problem 1 - How much is Fred's maximum personal contribution to pay for his
deficit capital?
4. Problem 1 - How much will Fred receive upon liquidation after considering the
personal contributions of Dale and Edgar?
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